A dilemma, alerting the ‘accidental American’

While the US has the right to prosecute, why would they?

I've read accounts of people in the OP's friend's position who have contacted the IRS to clarify things and have received letters nasty threatening FBAR and non tax filing fines. Of course they could simply ignore these, but they are now on the US radar so it becomes an issue going to America. This through no fault of their own.

The trouble ishe IRS seems to make no distinction between the knowing US citizen and the accidental US citizen.

Just to say thank you, I appreciate all of your comments.

As some have identified, the object is to not be an alarmist over an issue that may not be that critical, but alerting the individual of the implications (and they do exist) is equally important. As I indicated, everything after that point is their decision. Those express my main (conflicting) thoughts.

The individual in question seemed pleased with their US roots, even though they had no intention of pursuing them. Unfortunately, the children’s desires to explore those roots could inadvertently create some unwelcome surprises. It appeared to be more of a curiosity than an intention. If they realised the possible consequences, they might be less enthusiastic.

I feel slightly ‘peeved’ to be placed in this situation, no matter how trivial, thanks to an imprudent US Congress. It also crossed my mind that FATCA could hold some unpleasant consequences for the accidental American. (camoscato: in current form, it’s similar to Finland demanding that every non-Finnish military in the world identify, and notify Finland of, all male residents in their jurisdiction under the age of 25 with any Finnish connections, who are therefore assumed to have been, or may be, evading military conscription in Finland. It’s up to those males to prove they are not, or were not, evaders.) It’s just something to bear in mind if you stumble across the ‘blissfully unaware’ accidental American at a wedding, or a funeral.

The individual in question seemed pleased with their US roots, even though they had no intention of pursuing them. Unfortunately, the children’s desires to explore those roots could inadvertently create some unwelcome surprises. It appeared to be more of a curiosity than an intention. If they realised the possible consequences, they might be less enthusiastic.

I wouldn't worry too much about this aspect.  Upon doing a bit of research those children or the accidental american will find out that his children do not have claim to US citizenship, as the parent has not met the requirement of of living in the US for at least five years. 

I guess my feeling is....if the guy has managed to exist without claiming his US citizenship for this long, why rock the boat and say anything.  I don't think the IRS is likely to be banging down his door.  And quite honestly if they do...do you think he is going to blame you for not giving him a heads up? 

Upon doing a bit of research those children or the accidental american will find out that his children do not have claim to US citizenship, as the parent has not met the requirement of of living in the US for at least five years.

Thanks for the insight karin. Well spotted. Due to the dates, it may be the 10 year period.

IRS now offering special limited time offer of only 5% of your maximum liquid assets to accidental Americans. Buy now!

http://blogs.forbes.com/irswatch/2011/02/09/deja-vu-yet-another-irs-fbar-voluntary-disclosure-initiative/

IRS now offering special limited time offer of only 5% of your maximum liquid assets to accidental Americans. Buy now!

Saw the reference on British Expats site. (Other non-filers keep coming out from under the carpet.) What caught my attention was the paragraph near the bottom.

"McKenzie expressed concern, however, about one aspect of the IRS’ answers about the new initiative. An unknown number of taxpayers have made what is known as “quiet disclosure”—they’ve quietly mailed in amended returns including their offshore accounts and the income from them. The IRS indicated in its Q&A that while those taxpayers could participate in the new initiative, if they chose not to and they’re later identified, the “IRS may recommend criminal prosecution.” That’s a change, said McKenzie, from the traditional IRS practice of not prosecuting those who voluntarily amend returns, even if it’s in a quiet disclosure."

Oops, wrong article. Here's the Forbes article I was refering to:

http://blogs.forbes.com/janetnovack/2011/02/08/irs-offers-new-amnesty-for-offshore-tax-cheats/

I've read accounts of people in the OP's friend's position who have contacted the IRS to clarify things and have received letters nasty threatening FBAR and non tax filing fines. Of course they could simply ignore these, but they are now on the US radar so it becomes an issue going to America. This through no fault of their own.

The trouble ishe IRS seems to make no distinction between the knowing US citizen and the accidental US citizen.

I'd be very interested to hear in any cases of actual prosecution, though. I'm quite sure that the US government does fire off threatening letters in order to scare the bejeezus out of people, but, I ask again, what is the benefit in extraditing, prosecuting and imprisoning someone who doesn't actually owe you any money when there are financial fat cats actually on US soil owing thousands or even hundreds of thousands in unpaid taxes?


These laws are designed to catch people who are deliberately avoiding paying tax via the use of offshore accounts. And there are a LOT of people doing it. If your mate is a millionaire, or even has more than $10k in the bank, then it's worth him knowing this is the situation rather more urgently than if he's a teacher just making ends meet.

Seriously, this is all a bit like the "I can't travel to the UK on my US passport after getting British citizenship because my Visa is no longer valid" argument.



I hadn't filed taxes for some 20 years before finding out I still had to do it, and travelled to the US on many, many occasions and NEVER had an issue, and I'd actually filed a few times before I left at 17 and thus had a SSN to link to a passport! The ONLY reason I file taxes now is because I have surviving relatives who may need long term care thus my return (albeit temporarily) to the US.

You're talking about someone with no SSN and no US passport (so, just a name and probably no definite date of birth ever given, either) suddenly being arrested at an airport for not filing their taxes!

The travesty of the NO-FLY list will tell you that it's impossible to uniquely identify someone by a name alone.

But, the threatening letters are clearly doing their job.

You are probably right. But I guess probably isn't good enough for some people.

American Citizens Abroad (aca.org) have written many letters to President, Senate etc regarding taxation and banking issues for overseas US citizens but not received the courtesy of a single response:

http://www.facebook.com/topic.php?uid=57622739071&topic=14811

They seem to be deliberately ignoring the problems of roughly 5 million expats. It would be nice to hear what their policy really is.

Yeah, I can't count the number of times someone has said to me, after finding out I'm an American, "I really hate America because of its tax policies and how they are applied to Americans living outside the United States!"
 

I agree with camoscato.

I don't have a problem with paying US taxes abroad if I'm working.
In my opinion, it doesn't have much to do with people's "anti-American" attitudes...

I wonder if Boris Johnson (mayor of London) every filed his tax returns.

I wonder if Boris Johnson (mayor of London) every filed his tax returns.

I had no idea he was a US Citizen.  Learn something new everyday.

I had no idea he was a US Citizen.  Learn something new everyday.

Yep, born in New York City. Allegedly he's renounced his Citizenship but even so I still think he's liable for taxes for up to 10 years after doing that.

Yep, born in New York City. Allegedly he's renounced his Citizenship but even so I still think he's liable for taxes for up to 10 years after doing that.

It depends.  The rules changed and the 10 year requirement no longer exists.  If he expatriated before the rule change, he may have to file, if expatriated after the rule change, he doesn't.

From all I've read, you're only liable for taxes if at the time of your renunciation they tell you that you are. It's not automatic.